Tenant Remained Rent Stabilized After Building's J-51 Tax Benefits Expired

Tenants sued landlord, claiming they were rent stabilized. The building had received J-51 tax benefits, which expired on June 30, 2009. One tenant moved into her apartment on Dec. 1, 2008, under a rent-stabilized lease, and remains in occupancy. The court found that once the J-51 benefits expired, the apartment was never properly deregulated because that tenant remained in occupancy and had never received a J-51 lease rider advising her that she would become deregulated when J-51 benefits ended. The apartment therefore reverted back to to its original rent-stabilized status. But the other complaining tenant moved in on Sept. 1, 2013, and landlord had leased the unit to other tenants between the time when the building exited the J-51 program in 2009 and when tenant moved in. While the rent for those prior vacancies didn't exceed the $2,000 high-rent deregulation threshold in effect at that time, when the complaining tenant moved in the legal regulated rent was $2,085 per month. So that apartment was properly deregulated when tenant moved in.

Schaer v. Park Terrace Realty LLC: Index No. 161268/2018, 2023 NYLJ LEXIS 1338 (Sup. Ct. NY; 5/31/23; Goetz, J)